Tether focuses elsewhere while US seeks to regulate stablecoins

Business Times

25-05-2025

[CHICAGO] While Congress is considering bills that would help integrate stablecoins more into mainstream finance, the largest issuer of the digital tokens says it will continue to focus on serving markets besides the US.
On Monday (May 19), an industry-backed regulatory bill known as the Genius Act made its way through the Senate. The House Financial Services Committee has approved its own stablecoin measure, but it has yet to pass the chamber.
'It is important for us to see how the Genius Act is distinguishing between foreign issuers and domestic issuers,' Paolo Ardoino, chief executive officer of Tether Holdings, said on Friday. 'For us, the main interest will remain outside of the US.'
El-Salvador-based Tether's USDT stablecoin accounts for more than 60 per cent of the stablecoin market, with 420 million users across emerging markets. The company, which has had several clashes with state and federal authorities over the years, has been increasingly involved in the US amid a friendlier regulatory environment under President Donald Trump's pro-crypto administration.
Ardoino made his first visit to the US in March and stopped off in Washington while Trump held his inaugural digital-asset summit.
'We are looking at the Genius Act in a way that will allow us to be compliant,' Ardoino said. 'We can be compliant while still having a strong focus on foreign markets.'
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The stablecoin bills in the House and Senate require the tokens – usually pegged to the US dollar or another currency – to be fully backed by cash and 'safe assets' such as short-term Treasuries and make issuers subject to the Bank Secrecy Act and to anti-money-laundering regulations.
In addition, both bills would allow regulators to sign off on foreign issuers such as Tether if they're subject to 'comparable' rules overseas. However, the question remains on how strictly the law will deal with those that don't comply.
'Stablecoins are surely important in the United States, but it's true that in the United States you have tons of ways to pay each other with Zelle, PayPal, debit cards, credit cards, cash, you name it,' Ardoino said.
While Tether does not currently service US customers, most of the private company's reserve is comprised of assets that would be compliant with the proposed US legislation. The firm also backs its token with assets that would not be allowed, such as Bitcoin and secured loans. Because of its size, Tether would be regulated at the federal level if it chose to apply for a US license under such rules.
In 2021, Tether settled with US authorities over allegations that it lied about its reserves. Today, those reserves are managed by Cantor Fitzgerald & Co, which was until recently led by Trump's Secretary of Commerce Howard Lutnick. Ardoino has said the company may issue a new stablecoin that will adhere to the requirements, making it more attractive to institutional investors.
The more supportive regulatory environment in the US has also pushed Tether to progress towards delivering an audit of its reserves by a Big Four accounting firm, which Ardoino also said that Tether was still in discussions with. Currently, Tether releases quarterly attestations which are signed off by BDO Italia.
'They are going through a phase of adjustment, but a full audit is our priority,' Ardoino said.
Stablecoins have become crucial to the functioning of crypto markets, with about US$243 billion of them in circulation in May 2025. On Friday, The Wall Street Journal reported that a consortium of major banks, including JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, are exploring whether to jointly issue a stablecoin.
'We are not worried about the competitors coming from big banks, because they will look at the Western world,' Ardoino said. 'Our customer base are the three billion people unbanked that are not touching the banking system.' BLOOMBERG